Latest Edinburgh tram report receives criticism

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The Edinburgh City Council has released a new report highlighting progress made on the construction of the city tram system. But some in the Council remain pessimistic about the project’s financial viability, in light of budgetary discrepancies they have seen in the report, The Student has learned.

The report, released late October, showcases positive indicators of the project’s development and makes assurances that it will be completed within its expected budget and timeframe.

Among the report’s details are scheduling estimates for various sections of the tram line, which is to ultimately provide a link between the airport and the centre of town. For example, the construction on Princes Street, long an eyesore for tourists and locals, is set to be fully concluded by the end of November.

The report was optimistic on prospects for the project’s completion over all, maintaining projections that the first trams could be sent on test runs in early 2014.

Throughout its history, the tram project has attracted public scorn regarding its budget, which is wholly financed by the city after First Minister Alex Salmond refused to provide national funding.

But the new report is positive on its budgetary targets, assuring that the construction budget would not exceed £776 million. However, the overall figure has increased over the years from its initial value of £545 million, as the project has encountered pitfalls and deadline issues with its contractors. However, analysts warn that the actual price tag will likely exceed £1 billion once financing and borrowing costs are factored in.

To date, the project has consumed £669 million, according to the report.

“As everyone knows, there have been a number of challenges to overcome,” Leslie Hinds, transport leader for the Council said in a statement. “However, I’m very pleased that we are continuing to move in the right direction.”

Not everyone on the Council is quite as pleased with the details of the report. In interviews with The Student, councilors for the opposition have expressed doubts about the accuracy of the report’s financial figures.

He explained, “They’ve tried to move funds designated for off road construction to on road construction, which projects an image of less fiscal irresponsibility than there actually is.

Other councilors have taken issue with the Council’s use of so-called “risk contingency funds”, which amount to £34 million and are intended to be used for unpredictable scenarios.

“Various politicians are misrepresenting the total amount of the project, by adding the risk money to the budget as if it’s already being used,” he explained to The Student. “It’s not an honest portrayal.”

“If the Council administration are to be believed that they want to be transparent and open about the project, then they should be giving us the information and allowing us to see if this really is the truth,” he continued.

Both councillors said that the discrepancies boded poorly for the projects overall financial health and the integrity with which it was being carried out.

Transport leader Leslie Hinds dismissed the councilors’ concerns.

“The project team are confident the project will be delivered on the revised budget and programme,” she told The Student.

Addressing the apparent budgetary discrepancies brought up by Rose, she explained, “There have been no costs transferred from on street to off street. The off street section includes the historical costs that were settled as part of the settlement agreement lump sum which includes the cost of the initial work on Princes Street.”

Hinds also waved off the possibility raised by Whyte of the risk budget being abused. “The intent is not to spend all the risk allowance and mitigations are in place to try and avoid this,” she explained to The Student. “This was assessed last year and was externally validated. We are confident the project team are managing risk very tightly.”

Councillors Whyte and Rose have reserved their concerns until the budget is examined in further detail by the Governance, Risk and Best Value Committee.

A full report on the internal mechanisms of the budget is due to be released by that committee this week.